Virus Relief: UBS Delays Higher Comp Hurdles for Team Bonuses and Clubs
Acknowledging the coronavirus’ impact on customer service priorities and productivity, UBS Wealth Management USA has postponed by three months stiffer requirements for advisors to qualify for higher team payouts and for 2021 membership in production-based clubs.
UBS also is tossing out higher criteria it planned to impose for 2021 membership in its four recognition councils that offer reward trips and other perqs, using 2019 production instead of what brokers might generate in the current crisis year.
“As you have been there for our clients, colleagues and communities, we want to support you to continue to stay focused on what’s more important—the relationships you’ve built,” Chandler wrote in the memo that brokers received two weeks ago. “As a result, we are extending the effective date for the previously announced changes to teaming and rolling back Recognition Club qualification changes.”
The changes acknowledge brokers’ need to focus on client hand-holding during the health crisis and its economic and market disruptions, the memo indicated. “During challenging times, our value proposition becomes self-evident, with advice never more important nor more of a differentiator,” it said.
The delays may also reflect UBS’ desire to ameliorate broker discontent. The higher team-grid requirements generated backlash when first announced last year, causing the firm to postpone implementation, even before the spread of Covid-19, to July from the planned January 2019 start.
Other retail brokerage giants also have made accommodations to the crisis, including offering recruiting loans based on year-end 2019 numbers rather than on March 2020 12-month trailing numbers, according to several executives and recruiters.
Morgan Stanley has delayed until October 1 its plan to raise payout grid thresholds that would have required many of its brokers to produce more revenue to earn the same payouts as in 2019. The higher hurdles were originally slated to become effective on April 1, 2020.
Merrill Lynch has waived its plan to review at midyear whether teams could continue to qualify for higher payouts than they would receive as individuals. It is allowing current team payout qualifications to remain in place through yearend.
Wells Fargo Advisors and RBC Wealth Management-U.S. have relaxed payout penalties they had planned to impose on “small” household accounts, acknowledging that assets in client accounts have been dented by the coronavirus’s effect on the economy. (The S&P 500 fell almost 34% from an all-time high on February 19 to its March low point after the pandemic spread to the U.S.)
UBS stimulated additional internal pushback when it suggested last month that brokers reach into their own pockets to support staff who might be struggling with childcare and other issues during the shelter-at-home coronavirus crisis.
“These modifications will allow us to prioritize what matters most to all [of] us—people,” Chandler’s memo said. “I am confident that we will emerge from this crisis stronger and as more trusted partners to our clients.”
UBS has not modified across-the-board hikes in production thresholds that took effect at the start of 2020 for individual advisors, other team compensation qualification changes that will still take effect on July 1 or production “multipliers” for recognition club purposes that are tied to generating new business, Chandler wrote.
A UBS spokesman declined to comment on the memo.